Dutch civil service pension fund ABP, one of the biggest pension funds in the world, paid €2.8 billion in costs to private equity funds last year, according to its annual report.
The fund, which pays the corporate pensions of one in six people working in the Netherlands, has not put up pensions for years, because its assets have fallen below the recommended levels.
ABP chairman Harmen van Wijnen told news website Nu.nl that the payments represent a dilemma. ‘It is an awful lot of money,’ he said, adding that by using private equity houses, the fund has been able to boost its assets, making it more likely that pensions can be increased.
ABP uses private equity funds to invest in companies which are not listed on the stock exchange and the €2.8 billion generated €14 billion extra in returns, he said. ‘That is around €4,500 per participant, while the cost is €1,100,’ Van Wijnen told the website.
Despite the benefits, Van Wijnen said ABP should have a proper, critical look at the strategy and the costs which the fund has to pay to manage its entire portfolio.
Thank you for donating to DutchNews.nl
The DutchNews.nl team would like to thank all the generous readers who have made a donation in recent weeks. Your financial support has helped us to expand our coverage of the coronavirus crisis into the evenings and weekends and make sure you are kept up to date with the latest developments.
DutchNews.nl has been free for 14 years, but without the financial backing of our readers, we would not be able to provide you with fair and accurate news and features about all things Dutch. Your contributions make this possible.